KUCHING: Matrix Concepts Holdings Bhd’s (Matrix) financial year 2021 (FY21) sales target of RM1.1 billion has been viewed as achievable despite market conditions.
The research arm of Hong Leong Investment Bank Bhd (HLIB Research) noted that this was because over RM700 million worth of property bookings was made during the Movement Control Order (MCO) period.
“We understand that RM1,041.7 million worth of gross development value (GDV) will be launched in FY21, with 87 per cent stemming from its key township at Bandar Sri Sendayan while the rest are from Bandar Sri Impian.
“We expect the high-rise projects in Klang Valley (in Puchong and Damansara Perdana) to only be launched earliest in FY22, depending on market conditions,” the research arm said.
On the group’s Menara Syariah in Indonesia, HLIB Research highlighted that prior to the halt in operations from Covid-19, the Menara Syariah Twin Towers was ahead of schedule with piling works done.
“However, an approximate six-month delay in completion (subject to health advisory by the Indonesian authorities) is now expected as work on-site has yet to resume.”
The research arm recapped that the initial completion date was targeted for 2021.
“Management has clarified that the delay is not expected to cause losses for Matrix. Sales and marketing activities will be carried out once construction resumes.”
Overall, HLIB Research projected that earnings visibility will continue to be supported by new sales and unbilled sales of 0.8-fold cover (RM1 billion).
“To compensate for the slowdown of construction progress during MCO, construction works are being ramped up to get it back on track (targeted to catch up within six months).”
In terms of dividends, the research arm conservatively expected Matrix to be able to pay at least 10.5 sen per share for FY21 which translated to a yield of 5.7 per cent.
“Furthermore, Matrix’s healthy balance sheet of 0.07-fold net gearing as of FY20 will provide the buffer to sustain through this challenging environment.
“We continue to like Matrix as it is well-positioned to ride on affordable housing theme within its successful townships with cheap land cost and sustained property sales.
“This is supported by an attractive dividend yield of 5.7 per cent for FY21 and 6.8 per cent for FY22, being one of the highest in the sector.”